Who has the cost risk in a fixed fee plus cost project?
A)The buyer of the project
B)The seller or team executing the project
C)The cost risk is shared
D)The project manager
E)None of the above

Question

Quizplus · Accepted Answer

In a fixed fee plus cost project, the buyer has the cost risk. (Editor's note: An example is paying a handy man $500 to hang up your new TV. You would pay for costs such as the bracket and parking outside your Boston apartment, since there is zero public parking).
Key takeaway: While your vendor should realize that managing cost is important to your future relationship, it is best to put in provisions and incentives for a vendor to manage costs in such a relationship. While you might be tempted to avoid this type of deal, often it is not possible in projects that have uncertainty about resource needs.

Who Has the Cost Risk in a Fixed Fee Plus